BUSM2450-W01-Fall2020-TeamAsst5-BusinessPlan-Team-ReTRU

Team Re:TRU 3 4.6 Distribution .................................................................................................................. 20 5.0 Design and Development Plans .................................................................. 20 5.1 Development Status and Tasks .................................................................................. 20 5.2 Difficulties and Risks .................................................................................................. 21 5.3 Product Improvements and New Products ............................................................... 21 5.4 Costs of Design and Development ............................................................................. 21 5.5 Proprietary Issues ....................................................................................................... 22 6.0 Manufacturing and Operations Plan ........................................................ 22 6.1 Operations Schedule ................................................................................................... 22 6.2 Geographic Locations ................................................................................................. 22 6.3 Facilities and Improvements ...................................................................................... 24 6.4 Strategy and Plans ...................................................................................................... 24 7.0 Management Team ..................................................................................... 24 7.1 Organization ................................................................................................................ 24 7.2 Key Management Personnel ...................................................................................... 26 7.3 Management Compensation / Ownership ................................................................ 29 7.4 Employment and Other Agreements, and Stock Options and Bonus Plans ......... 29 7.5 Board of Directors ....................................................................................................... 30 7.6 Supporting Professional Advisors and Services ....................................................... 30 8.0 Overall Schedule ......................................................................................... 31 8.1 Pre-Launch .................................................................................................................. 31 8.2 Action Plan Phases ...................................................................................................... 32 8.3 Review Plan Process ................................................................................................... 32 8.4 Corrective Action Schedule ........................................................................................ 32 9.0 Critical Risks ............................................................................................... 33 9.1 External – Market, Technology, Assumptions ......................................................... 33 9.2 Internal – Management, Financial, Plan .................................................................. 34 10.0 The Financial Plan .................................................................................. 36 10.1 Pro-Forma Income Statements .................................................................................. 36 10.2 Pro-Forma Balance Sheets ......................................................................................... 37

Team Re:TRU 6 List of Figures Figure 1 - Gross Profit, Net Profit, and Operating Margins .................................................. 15 Figure 2 - Revenues and Net Income ......................................................................................... 16 Figure 3 - Fixed and Variable Costs .......................................................................................... 17 Figure 4 Operations Schedule .................................................................................................... 22 Figure 5 - Short-Term Organizational Structure .................................................................... 25 Figure 6- Long-Term Organizational Structure ...................................................................... 25 Figure 7 - Five Year Pro-Forma Income Statement Chart ..................................................... 36 Figure 8 – Pro-Forma Balance Sheet Chart ............................................................................. 37 Figure 9 - Five Year Pro-Forma Cash Flow Waterfall Chart ................................................ 38 Figure 11 - Menswear Ad Example ........................................................................................... 46 Figure 10 - Womenswear Ad Example ..................................................................................... 46 Figure 12 - Year 1 Pro-Forma Income Statement - Revenues ................................................ 51 Figure 13 - Year 1 Pro-Forma Income Statement – Expenses & Net Income ....................... 52 Figure 14 - Year 2 Pro-Forma Income Statement - Revenues ................................................ 53 Figure 15 - Year 2 Pro-Forma Income Statement – Expenses & Net Income ....................... 54 Figure 16- Five Year Pro-Forma Income Statemen ................................................................ 55 Figure 17 - Year One Pro-Forma Balance Sheet ..................................................................... 56 Figure 18 - Five Year Pro-Forma Balance Sheet ..................................................................... 57 Figure 19 - Pro-Forma Cash Flow Statement .......................................................................... 58

Team Re:TRU 9 1.0 The Opportunity 1.1 The Industry Fashion is a trillion-dollar industry, and there is an ever-growing market for sustainable fashion with consumers that desire ethical clothing. 2 Sustainably made unisex fashion is a niche market as most Canadian apparel companies offer predominantly men’s and women’s clothing lines. There is no obvious leader in the market who offers garments at an affordable price point. Consumers are becoming more aware of the greenwashing practices of large chain stores and are turning towards more transparent sustainable fashion brands. The global ethical fashion market is expected to grow from $6.35 billion in 2019 to $8.25 billion in 2023, and $15.17 billion by 2030. 3 1.2 The Company and the Concept Re:TRU is an affordable unisex apparel brand, characterized by its use of upcycled materials that would otherwise end up in landfills. Our business has the unique opportunity to introduce a circular fashion cycle to consumers countering the abundance of fast fashion brands in the market. The closed loop system reduces textile waste and further harm to the environment. We will create value for customers by eliminating their need to purchase low quality, disposable, fast fashion products. 1.3 The Product or Service Re:TRU will sell clothing made from eco-friendly, deadstock, or upcycled materials. Our TRU- basics collection will include wardrobe essentials that deliver a balance of comfort, quality, and

Team Re:TRU 12 long-term value. This last market segment represents 8% of the population and has the lowest average annual income of all four groups. 2.2 Market Share and Trends The number of e-commerce apparel users is estimated to reach 25.7 million by 2025. 5 The e- commerce apparel industry is growing and the user penetration rate is expected to increase from 46.3% in 2020 to 65.3% in 2025. 6 Re:TRU’s target market segments are based on the Canadian population between the ages of 15 to 64. Between 2017 to 2019, the population increased at a rate of approximately 1% annually and dropped to 0.56% from 2019 to 2020. 7 The decreased rate of growth is explained by the declining birth rate and aging population. 8 Canada’s population is increasing at a slow rate, but immigration supports its growth and accounts for 50% of the country’s population gains. 9 Consumer behaviour in Canada now emphasizes the importance of ethical living. Canadians are interested in buying goods that can be repaired rather than replaced and prefer to purchase products from brands that reflect their concern for the environment. 10 There is also an increasing number of consumers that utilize technology to improve everyday life. 11 2.3 Competition and Competitive Advantage Tentree Tentree is our biggest competitor because of their focus on environmental initiatives. Their products are available online and in over 1000 retailer locations globally. Their pledge to plant ten trees per product purchased differentiates them from other competitors. Consumers can also register trees so they know exactly where their contribution will be going.

Team Re:TRU 15 3.0 Economics of the Business 3.1 Gross and Operating Margins Figure 1 - Gross Profit, Net Profit, and Operating Margins Gross margin ratios show that we retain and average of $0.62 per dollar of revenue with a slow increase over the first five years. This increase is positive as it shows that our expenses are well managed compared to the increase in sales. In addition to apparel, domestic sales across every sector indicate growth. Forty percent of Canadian online shoppers report their intention to purchase more from Canadian businesses in 2020. 15

Team Re:TRU 18 3.4 Months to Breakeven Our breakeven point is based on fixed costs over the gross margin percentage of 62% in year one. This is equal to $954,254.83 in revenue. We will reach this break-even point in the fourth month of operations when we launch our website and start generating revenue. Refer to Figure 7 - Five Year Pro-Forma Income Statement Chart. 3.5 Months to Reach Positive Cash Flow Our financial projections will have positive cash flow in the first month of operations because we will not see any negative net changes in cash. This is due to strict budgeting and allocating our founders’ initial investments towards capital expenditures . Refer to Figure 19 - Pro-Forma Cash Flow Statement. 4.0 Marketing and Sales Plans 4.1 Overall Marketing Strategy Re:TRU will focus on attracting customers by reminding them of their core values. Sustainability features will be the center of marketing campaigns. Marketing visuals will depict the quality and lifestyle that Re:TRU offers. This will differentiate us from similar brands because we will showcase the transparency of our offerings. We will interact with our four market segments through social media, targeted radio ads, online ads, and print ads. This phased approach is detailed in section 4.5. We will also focus on re-marketing to consumers to sustain repeat purchases. This will be achieved through personalized ads and post-purchase interactions.

Team Re:TRU 21 We will need to develop social media pages and a website before we advertise and create brand deals. Most importantly, we are still developing a logo for our brand. 5.2 Difficulties and Risks “Borrowing” ideas and concepts from other brands is standard practice in the fashion industry. This risk is lessened by the small number of unisex fashion brands in the industry. One major supply chain risk is material sourcing because upcycled materials will not always be sourced from the same vendor. This means there could be potential issues with the quality and consistency of the materials we receive. Manufacturing overseas is another risk we are aware of. We will need to find alternative manufacturers if our overseas manufacturer is suddenly forced to stop production. We will still be able to ship materials and produce garments locally to mitigate this risk, but at higher costs and decreased efficiency. 5.3 Product Improvements and New Products Our team will actively interact with and collect product feedback from customers for future improvements. Pop-up shops will benefit us because customers will convey their likes and dislikes to us directly. From this, we will gain an understanding of how to make enhancements and revisions to products for future collections. It is imperative that the Re:TRU team is focused on constantly improving products offered because new collections will be designed and developed every season. 5.4 Costs of Design and Development Major costs will be hiring a web developer for the website and a design team for apparel. Minor costs include materials used for design prototypes.

Team Re:TRU 22 5.5 Proprietary Issues Re:TRU will pursue a trademark for the brand name, brand images, and logo. Members of the fashion industry do not typically pursue design patents as the expense is not worth the hassle because fashion trends change so often. 20 We will design unisex products to gain a competitive advantage by not limiting our apparel to one gender. Our brand will be inclusive of all genders and we will accommodate a variety of body types. 6.0 Manufacturing and Operations Plan 6.1 Operations Schedule Figure 4 Operations Schedule Re:TRU will be using ocean and sea LCL shipments four times a year to fulfill projected purchasing from customers. 6.2 Geographic Locations Re:TRU will operate primarily as an e-commerce business. Therefore, the company’s website will be the “destination” location for customers. Re:TRU will have pop-up shops in Vancouver for the following reasons:

Team Re:TRU 23 Table 2 - Geographic Location of Pop-Up Stores Our warehouse will be in Vancouver. We chose this location for several reasons: Table 3 - Geographic Location of Warehouse We will outsource manufacturing for our TRU-basics collection to a garment factory in Bali, Indonesia. The reasons are listed below: Table 4 - Geographic Location of Overseas Manufacturer

Team Re:TRU 24 6.3 Facilities and Improvements We will rent a warehouse space in the Greater Vancouver area. This location will serve as an office for employees and a storage site for inventory. We will purchase various office electronics, office supplies, and furniture. We will also purchase site insurance to protect our assets and inventory. There are no plans to expand to a second location in the next five years. Refer to Appendix 13.3.1 for a detailed expense list. 6.4 Strategy and Plans Manufacturing will be split between two locations: Vancouver for the TRU-cycle collection and Bali for the TRU-basics line. We will project the quantity of inventory needed to satisfy demand based on our base cases. We will ensure that the working conditions of sub-contracted employees are up to par with the company’s ethic al standards and local regulations. Re:TRU’s partnering garment manufacturing factories must operate by the SA8000 Standard, which reflects labour provisions contained within the Universal Declaration of Human Rights and International Labour Organization (ILO) conventions. 21 7.0 Management Team 7.1 Organization Initially, Re:TRU will follow a flat organizational structure. We chose this structure because the quantity of personnel at this stage will be low. Business activities will be shared among the five founders based on their strengths and weaknesses.

Team Re:TRU 25 Figure 5 - Short-Term Organizational Structure After a few years of operations, more personnel will join the team. Re:TRU will slowly begin to transition to a functional organizational structure. Figure 6- Long-Term Organizational Structure

Team Re:TRU 26 7.2 Key Management Personnel Marlee Omelaniec – CEO & Finance Manager Marlee is the CEO and creator of the Re:TRU brand. She developed the idea from creating her own vintage upcycled designs and through her knowledge of sustainable fashion. Marlee was mentored at a young age by her family members who run a successful third generation family business in Langley, B.C. It was through summer jobs at the office and lessons from her grandfather that she discovered her entrepreneurial drive at a young age. Marlee has notable experience in the retail sector, specifically in the fashion industry, and has education in Business Administration as well as E-commerce Fashion Business Management. She gained further experience by running an online boutique focused on vintage resale. This helped establish her knowledge in sourcing vintage goods and fostered connections in the Vancouver fashion exchange. Isabel Cordovani – Marketing Assistant & HR Manager I sabel has several years of experience working in the service industry. Her outstanding people skills as well as her strong written and verbal communications will be of great use to Re:TRU. Isabel has proven herself able to develop rapport with clients and is skilled at generating repeat business. Her talents include a high level of patience, determination, and creative thinking when troubleshooting client issues. She recently completed an internship as a staffing

Team Re:TRU 27 specialist. During this time, she was responsible for updating employee profiles, collecting employee performance data, conducting interviews, and facilitating new employee orientation. Isabel is responsible for recruitment related activities. Hillary Tsui – Operations & Purchasing Manager Hillary is responsible for operations. She has developed interpersonal, problem-solving, and communication skills from her many years of working in customer service. Working in fast-paced environments has also taught her time management and organizational skills. Her experience of working in fashion warehouses and production sites is an asset to the role. Tamara Lee – Marketing Manager Tamara has several years of experience working in customer service and retail. Prior to the development of Re:TRU, she was in a management role at a large global fashion company. While working in this position for over five years, she gained a thorough understanding of how to carefully craft exceptional customer service experiences and tailor the shopping process to fit consumer needs. During her time there, she was also responsible for organizing monthly VIP clientele events. Her background and understanding of the importance of customer engagement will be an advantage to the Re:TRU team.

Team Re:TRU 28 Kathryn MacKinnon – Creative Director Kathryn was compelled to learn how to sew at a young age. Growing up as a competitive figure skater in a small town in Nova Scotia, costumes were often unavailable. She has a deep understanding of fit, quality, and garment construction from years of experience behind a sewing machine creating her own designs. Each of these skills is an asset to the position of Creative Director. After years of creating competition costumes, Kathryn spent time doing extensive charity work with World Vision Canada. While working for World Vision Canada, she was involved in hiring, training, and running fundraising teams. She has now settled in Vancouver where she has been volunteering for the non-profit fabric recycling initiative Our Social Fabric.

Team Re:TRU 29 7.3 Management Compensation / Ownership Table 5 - Personal Investment and Ownership The personal investment that each member makes in Re:TRU will dictate their ownership percentage in the company. During the pre-launch and early stages of Re:TRU, all business activities will be assigned to the five founders who will forgo personal salaries until Re:TRU will have surpassed the breakeven point. Based on our projections, we will be able to pay ourselves a salary by year two. Salaries are based on both the industry standards for our respective roles and the company’s overall financial performance. 7.4 Employment and Other Agreements, and Stock Options and Bonus Plans Re:TRU will hire one full-time fashion designer as well as a small group of part-time distribution and sales support staff to work during peak seasons. We will not hire additional full-time staff until necessary. Staff with full-time employment contracts will be eligible for two-week paid vacation time, sick time, and flexible or remote working options.

Team Re:TRU 30 7.5 Board of Directors The board of directors will be composed of the five founders and two additional investors. Appointing external directors will help with corporate governance as they will offer valuable expertise. They will also provide business connections and contacts to the Re:TRU team. The chairman will be appointed through election. Each director will have one vote, and decisions will be made by majority vote. 7.6 Supporting Professional Advisors and Services Web Designer Capital will be invested to create and upkeep a user-friendly site that customers can easily navigate. Re:TRU will contract a web development company to construct the website as none of the founders have a background in information technology or programming. Detailed expenses are listed in Appendix 13.3.4. Lawyer Re:TRU will contract a lawyer to assist with the process of filing for incorporation. The lawyer will also ensure that all employment contracts and investment agreements are legally binding. They will be paid on an hourly basis. Lightspeed POS Re:TRU will use Lightspeed Retail POS software to process customers payments, track inventory, manage employees’ wages , and keep track of bookkeeping. Sales, COGS, and operating expenses data will be collected to generate accounting reports.

Team Re:TRU 31 8.0 Overall Schedule Table 6 - Five Year Schedule 8.1 Pre-Launch Table 7 - Pre-Launch Schedule

Team Re:TRU 32 8.2 Action Plan Phases We will focus on driving growth, customer acquisitions, and monitoring KPI’s in addition to the campaign schedule below. The gift guide campaign in December will be launched online and through direct email marketing. Table 8 - Campaign Schedule 8.3 Review Plan Process Re:TRU will conduct quarterly product reviews using information from the customer feedback feature on our website and customer surveys. It is important to remain receptive to customer feedback so that there is continuous improvement of the quality of our products. 8.4 Corrective Action Schedule Feedback from customers is fundamental to all corrective actions needed for our products. We will evaluate the information communicated to us by our customers and make adjustments accordingly.

Team Re:TRU 33 9.0 Critical Risks 9.1 External – Market, Technology, Assumptions Table 9 - Market Risk - Similar Product The impact of this risk will depend on the firm developing the competing product. For example, the impact of Kotn selling products using upcycled materials compared to a smaller fashion start up is very different. Competing with a firm like Kotn will be difficult because they have the advantage of a tight supply chain. Competing firms and their new product releases will be monitored regularly to gage potential risk to our business.

Team Re:TRU 34 9.2 Internal – Management, Financial, Plan Table 10 - Financial Risk - Supplier Failure Our business will be significantly impacted if suppliers fail to deliver high-quality garments. We will decrease the probability of this risk occurring with clear communication and well-defined expectations of suppliers. The customer relations manager will investigate all products whose customer refund rate is higher than the standard. The operations manager will contact the supplier immediately to discuss next steps to rectify the situation if the issue points to the manufacturing quality.

Team Re:TRU 35 Table 11 - Financial Risk - Overestimating First Year Sales The accounting and finance team will closely monitor actual sales and expenses in comparison to projected sales. This will also allow us to resolve financial issues as soon as they arise.

Team Re:TRU 36 10.0 The Financial Plan 10.1 Pro-Forma Income Statements Figure 7 - Five Year Pro-Forma Income Statement Chart The important trend to note in our pro-forma income statement is the positive increase in net income over the first five years, which increases with both net sales and COGS. Figure 6 illustrates the gradual increase of net sales and net income with sales projections. This reaches 5.5% CAGR in year five. The chart shows a positive NPV net income which demonstrates the value of the investment over time in relation to the original value. See Figure 16- Five Year Pro- Forma Income Statement for detailed income statements.

Team Re:TRU 37 10.2 Pro-Forma Balance Sheets Figure 8 – Pro-Forma Balance Sheet Chart The graphic above shows high current assets with steady growth in the first five years of operations. This demonstrates future profit potential and will allow flexibility in our operations. We will have no receivables as our website will accept credit and debit payments at the time of purchase. We will not be distributing to retailers either. The key trend here is the growth of current assets in comparison to low current liabilities. In year one, our current ratio is 3.1. Based on our projections, this will increase to 4.1 in year five. We also have no long-term liabilities.

Team Re:TRU 38 We will operate on a low debt-to-equity ratio of 0.46 in year one. This decreases to 0.26 by year five. Refer to Figure 18 - Five Year Pro-Forma Balance Sheet for details. 10.3 Pro-Forma Cash Flow Analysis Figure 9 - Five Year Pro-Forma Cash Flow Waterfall Chart Figure 8 depicts the cash flows in the first five years, beginning with the founders’ original $300,000 investment. We will reduce the risk of nearing net zero cash flows due to potential financial burden in inventory orders by efficiently using initial cash flow to generate revenue. There is no distribution of dividends currently recorded in our cash flow statement. Thus, reducing cash outflows. Our need for capital expenditures for assets such as land or equipment maintains a steady growth of cash flow. Refer to Figure 19 - Pro-Forma Cash Flow Statement for the five-year cash flow statement.

Team Re:TRU 39 10.4 Cost Control Our variable costs distinguish our profit potential from other firms in the industry. Our e- commerce model ensures we will not strain our fixed costs as brick-and-mortar stores require rent and lease payments. We will maintain fixed costs of our manufacturing space as well as variable and fixed labour costs by outsourcing production to domestic and international manufacturers. 10.5 Highlights Key highlights of our financial projections include the break-even point which occurs in the first year of operations. This shows potential for a quick return on investments. In year two, there is a drop in profit margins. This is based on an increase in costs as a result of the salaries for the five founders. However, as demonstrated, this decrease will correct itself in the fourth year. 11.0 Proposed Company Offering 11.1 Desired Financing Re:TRU is asking for $275,000 to fund inventory orders and operating expenses in the first year of business. The preferred date of this funding is April 2021. 11.2 Securities Offering The founders are offering 10% equity for $275,000 with a ROI of 50%. This calculation is based on a P/E ratio of 8 and a market cap of $19,279,760, which comes from our estimated 5 th year earnings of $2,409,970. Our valuation is based on ASOS, which is a fashion retailer with a similar business model. ASOS offers men’s and women’s clothing and accessories through e - commerce. Their 36.23 P/E ratio and 4.543 billion market cap is far higher than where we expect

Team Re:TRU 40 to be. 22 We compared this to Rocky Brands, a smaller company that provides niche products through online sales and whose P/E ratio is 13.74. 23 We also compared our findings to Hanesbrands whose P/E ratio is 11.7. 24 For valuation calculations see Table 20 - Valuation Calculation 11.3 Capitalization Table 12 – Capitalization The founders hold 90% ownership after their initial $300,000 investment prior to any outside funding. Marlee Omelaniec being the majority shareholder with 30% ownership and 30,000 shares. The remaining four founders hold 15% ownership, and 15,000 shares each. The 10% is reserved in preferred stock options for the Series-A funding round. After investment funds have been secured, 10,000 shares and 10% ownership in preferred stock will be allocated to the investor. There will be no additional allocation of shares after this.

Team Re:TRU 41 11.4 Use of Funds The founders’ capital investments will go towards the design process, building a supply chain by ordering inventory, creating a website, and digital content. We will use series A funding towards prepaid rent on our Vancouver warehouse, payroll, and equipment. The first stage of investment funds will also be used for funding marketing budgets, inventory orders, and payroll.

Team Re:TRU 42 12.0 Bibliography “Apparel - Canada | Statista Market Forecast.” Statista, 2020. https://www.statista.com/outlook/249/108/apparel/canada?currency=cad . “ASOS PLC ORD 3.5P (ASC.L) Stock Price, News, Quote & History - Yahoo Finance.” finance.yahoo.com. Accessed November 30, 2020. https://finance.yahoo.com/quote/ASC.L?p=ASC.L&.tsrc=fin-srch . A&EClothingCorp. 2018 Product Catalogue , 2018. bdc. “5 steps to create a winning market entry strategy: Set clear goals and study the target market before you start exporting.” bdc, accessed November 27, 2020. https://www.bdc.ca/en/articles-tools/marketing-sales-export/export/winning-market- entry-strategy Bedford, Emma. Global Apparel Market - Statistics & Facts . Statista, January 21, 2020. https://www.statista.com/topics/5091/apparel-market-worldwide/ “BOOHOO GROUP PLC ORD 1P (BOO.L) Stock Price, News, Quote & History - Yahoo Finance.” finance.yahoo .com. Accessed November 30, 2020. https://finance.yahoo.com/quote/BOO.L?p=BOO.L&.tsrc=fin-srch . Canada Post. “Canadian e - Commerce by the Numbers: Business Matters: Canada Post.” Business Matters | Canada Post, May 14, 2020. https://www.canadapost.ca/blogs/business/ecommerce/canadian-e-commerce-by-the- numbers/ . Canada. Statistics Canada. Population Estimates on July 1st, by Age and Sex . Population estimates on July 1st, by age and sex (Government of Canada, Statistics Canada, September 29, 2020). https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1710000501 . “Compostable Mailers | Eco Friendly Mailers | Noissue.” www.noissue.co. Accessed November 30, 2020. https://www.noissue.ca/custom-packaging/compostable-biodegradable- mailers .

Team Re:TRU 43 Canada Revenue Agency. “Corporation Tax Rates - Canada.Ca.” Canada.ca, 2020. https://www.canada.ca/en/revenue- agency/services/tax/businesses/topics/corporations/corporation-tax-rates.html . “Employers’ Guide – Payroll Deductions and Remittances - Canada.Ca.” Canada.ca, 2020. https://www.canada.ca/en/revenue-agency/services/forms- publications/publications/t4001/employers-guide-payroll-deductions-remittances.html . Euromonitor International. “Megatrends in Canada.” Country Profile, August 2020, Passport. Government of Canada, Innovation. “Nuans - Home.” www.ic.gc.ca, December 4, 2018. http://www.ic.gc.ca/eic/site/075.nsf/eng/home . “Hanesbrands Inc. (HBI) Stock Price, News, Quote & History - Yahoo Finance.” finance.yahoo.com. Accessed November 30, 2020. https://finance.yahoo.com/quote/HBI?p=HBI&.tsrc=fin-srch . “Mobility | TELUS Small Business.” www.telus.com. Accessed November 30, 2020. https://www.telus.com/en/bc/business/small/mobility . “Office Internet Plans | TELUS Small Business.” TELUS. Accessed November 30, 2020. https://www.telus.com/en/business/small/internet/office-internet . “Office Phone, Internet & Security Bundles | TELUS Small Business.” www.telus.com. Accessed November 30, 2020. https://www.telus.com/en/bc/business/small/bundles?linktype=ge-meganav . Oleksand ra Baukh. “Everything You Need To Know About Garment Costing And Pricing.” Techpacker Blog. Techpacker Blog, May 3, 2020. https://techpacker.com/blog/design/everything-you-need-to-know-about-garment-costing- and-pricing/ . “Outlook on the Worldwide Apparel Industry to 2025 - Featuring PVH, Inditex & Kering Among Others - ResearchAndMarkets.com.” www.businesswire.com, May 14, 2020. https://www.businesswire.com/news/home/20200514005463/en/Outlook- Worldwide-Apparel-Industry-2025--- Featuring#:~:text=Global%20apparel%20market%20is%20anticipated.

Team Re:TRU 44 “Outsourced Your Custom Clothes Labels Production to Bali, Indonesia.” karmacomusa.com. Accessed November 30, 2020. http://karmacomusa.com/fastfashionfactoryasia . “Plans & Pricing | Compare Features | QuickBooks Canada.” quickbooks.intuit.com, n.d. https://quickbooks.intuit.com/ca/pricing/ . “POS System Price for Retail - Get the Best Point of Sale!” Lightspeed POS, 2019. https://www.lightspeedhq.com/pos/retail/pricing/ . “Printed Labels | Laven Labels.” laven.com. Accessed November 30, 2020. http://laven.com/products/printed-labels/ . “Rocky Brands, Inc. (RCKY) Stock Price, News, Quote & History - Yahoo Finance.” finance.yahoo.com. Accessed November 30, 2020. https://finance.yahoo.com/quote/RCKY?p=RCKY&.tsrc=fin-srch . “Services.” In House Creations. Accessed November 30, 2020. https://inhousemade.com/pages/services . “Shipping From Indonesia to Canada [Updated November 2020].” Freightos. Accessed November 30, 2020. https://www.freightos.com/shipping-routes/shipping-from- indonesia-to-canada/ . “Shopify Pricing - Setup and Open Your Online Store Today – Free Trial.” Shopify, 2017. https://www.shopify.ca/pricing . Spotify Advertising. “The data to prove it.” Accessed November 27, 2020. https://ads.spotify.com/en-CA/ The Business Research Company. “Sustainable Fashion Market Analysis Shows The Market Progress In Attempt To Decrease Pollution In The Global Ethical Fashion Market 2020.” Global Newswire, October 28,2020. https://www.globenewswire.com/news- release/2020/10/28/2116073/0/en/Sustainable-Fashion-Market-Analysis-Shows-The- Market-Progress-In-Attempt-To-Decrease-Pollution-In-The-Global-Ethicalfashion- Market-2020.html. The Georgia Straight, 2020. Media Kit 2020 . Available at https://www.straight.com/advertise- with-the-straight

Team Re:TRU 45 UpCounsel. “Fashion Patents: Everything You Need to Know.” Accessed November 28, 2020. https://www.upcounsel.com/fashion-patents “Warehouse Insurance - Cost & Coverage (2020).” generalliabilityinsure.com. Accessed November 30, 2020. https://generalliabilityinsure.com/small-business/warehouse- insurance.html . “What Is The Average Utility Cost Per Square Foot Of Commercial Property? | Iota.” Iota Communications, Inc., May 14, 2019. https://www.iotacommunications.com/blog/average-utility-cost-per-square-foot- commercial-property/ .

Team Re:TRU 46 13.0 Appendices 13.1 Marketing 13.1.1 Ad Copy Examples Figure 11 - Womenswear Ad Example Figure 10 - Menswear Ad Example

Team Re:TRU 47 13.1.2 Target Market Research 25 Table 13 – Market Research – Segment #1 & #2

Team Re:TRU 48 Table 14 - Market Research – Segment #3 & #4

Team Re:TRU 49 13.1.3 Competitor Research 26 27 28 Table 15 - Market Research - Competitors

Team Re:TRU 50 13.2 Risks 13.2.1 External Risks Table 16 – Market Risk - Forced Pandemic Shutdown Table 17 - Market Risk - Minimum Wage Increase

Team Re:TRU 51 13.3 Financials 13.3.1 Pro-Forma Income Statements Figure 12 - Year 1 Pro-Forma Income Statement - Revenues

Team Re:TRU 52 Figure 13 - Year 1 Pro-Forma Income Statement – Expenses & Net Income

Team Re:TRU 53 Figure 14 - Year 2 Pro-Forma Income Statement - Revenues

Team Re:TRU 54 Figure 15 - Year 2 Pro-Forma Income Statement – Expenses & Net Income

Team Re:TRU 55 Figure 16- Five Year Pro-Forma Income Statement

Team Re:TRU 56 13.3.2 Pro-Forma Balance Sheets Figure 17 - Year One Pro-Forma Balance Sheet

Team Re:TRU 57 Figure 18 - Five Year Pro-Forma Balance Sheet

Team Re:TRU 58 13.3.3 Pro-Forma Cash Flow Statement Figure 19 - Pro-Forma Cash Flow Statement

Team Re:TRU 59 13.3.4 Detailed Costs Table 18 Detailed COGS COGS Item Research Packaging Environmentally-friendly compostable and custom mailers with tissue paper: Small 10.2” x 15” (260mm x 385mm) – $.69 Medium 11.8” x 16.5” (300mm x 420mm) - $.82 Large 14.5” x 18.8” (370mm x 480mm) - $1.09 29 Notions (Extra Materials Each product has different needed notions like buttons, zippers, thread, and elastic. Estimated using a garment costing sheet from TechPacker. 30 Garment Tags and Labels Garment Tags and Labels also vary in cost per product depending on the type of tag needed. 31 Sweater and T-shirt (Indonesia Manufacturer) Cost to produce and fabrics Some products will be outsourced, to find information on the COGS for these products we used Karmacomusa Manufacturing as a reference. They have some pricing on their website, other fabric costs were researched online elsewhere. 32 Upcycled (Jeans and Jacket) The materials for fabric we sourced from a used/vintage clothing distributor called A&E Used Clothing Wholesale. 33

Team Re:TRU 60 Cost to produce and fabrics The cost of production quote came from a personal quote from one of the co-owners of InHouseMade Manufacturing. 34 Table 19 Detailed Expenses Expense Item Research Rent Our rent expenses in year 1 were based on a craigslist listing for a warehouse/office space in a business block in Richmond, BC. The posting is no longer available. The following years were based on an average price of $2 per square foot, then calculated to reflect total square footage needed due to higher demand for product and higher inventories. Payroll Taxes Payroll taxes and income taxes were calculated through the CRA website in their corporate tax information. 35 Income Taxes Payroll taxes and income taxes were calculated through the CRA website in their corporate tax information. 36 Wages Wages were based on average salaries in Canada on either Indeed or PayScale, for each position needed and based on either full-time or an approximate number of hours worked per year for the part-time employees. Mobile Phones Mobile phones are $75 a line for unlimited Canadian calling and 100 minutes international from TELUS. 37 Landline (Office/Warehouse) Our landline is bundled with our internet for $75 a month from TELUS. 38 Internet Internet provider is TELUS, Fastest Internet 1G plan for $100/month. 39

Team Re:TRU 61 Utilities Calculated 1.58 per square foot, per year, for our 1900sf warehouse/office based on average commercial utilities statistics. 40 Freight Based on a quote for 200kg/cubic metre shipment load (LCL) door-to-door from Jakarta to Vancouver. 41 Website (POS Software, QuickBooks, Host Fee) Lightspeed POS monthly subscription $159, 42 that automates accounting with the use of QuickBooks $25 for the first 3 months and $50 thereafter. 43 Web host fee $150/month provided by Shopify’s website info. 44 Insurance (Office/Warehouse) Insurance was based on a quote from a commercial insurance broker. 45

Team Re:TRU 62 13.4 Economics 13.4.1 Valuation 46474849 Table 20 - Valuation Calculation 13.4.2 Margins Table 21 - Five Year Margins

Team Re:TRU 63 1 sustainyourstyle, “Fashion & Environment,” SustainYourStyle, 2020, https://www.sustainyourstyle.org/en/whats-wrong-with-the- fashion- industry?gclid=Cj0KCQjwqfz6BRD8ARIsAIXQCf37UpsNOy6tqwD7x7nsyIAKEHfGTQJ0DSK4xX9AY5LBWIe0vD7aeTsaAjQeE ALw_wcB#anchor-environmental-impact. 2 Bedford, Emma. Global Apparel Market - Statistics & Facts . Statista, January 21, 2020. https://www.statista.com/topics/5091/apparel-market-worldwide/ 3 The Business Research Company. “ Sustainable Fashion Market Analysis Shows The Market Progress In Attempt To Decrease Pollution In The Global Ethical Fashion Market 2020 .” Global Newswire, October 28,2020. https://www.globenewswire.com/news- release/2020/10/28/2116073/0/en/Sustainable-Fashion-Market-Analysis-Shows-The-Market-Progress-In-Attempt-To-Decrease- Pollution-In-The-Global-Ethicalfashion-Market-2020.html. 4 bdc. “5 steps to create a winning market entry strategy: Set clear goals and study the target market before you start exporting.” bdc, accessed November 27, 2020. https://www.bdc.ca/en/articles-tools/marketing-sales-export/export/winning-market-entry-strategy 5 “Apparel - Canada | Statista Market Forecast,” Statista, 2020, https://www.statista.com/outlook/249/108/apparel/canada?currency=cad . 6 Ibid. 7 Government of Canada, Statistics Canada, “Population Estimates on July 1st, by Age and Sex,” Population estimates on July 1st, by age and sex (Government of Canada, Statistics Canada, September 29, 2020), https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1710000501 . 8 Euromonitor International, “Megatrends in Canada,” Country Profile, August 2020, Passport. 9 Ibid. 10 Ibid. 11 Ibid. 12 “Sustainable production,” Frank and Oak, accessed October 8, 2020, https://www.frankandoak.com/our -story/ideology 13 “Style Plan,” Frank and Oak, accessed November 15, 2020, https://www.frankandoak.com/clothing-subscription-box 14 “Apparel - Canada | Statista Market Forecast,” Statista, 2020, https://www.statista.com/outlook/249/108/apparel/canada?currency=cad . 15 Canada Post, “Canadian e - Commerce by the Numbers: Business Matters: Canada Post,” Business Matters | Canada Post, May 14, 2020, https://www.canadapost.ca/blogs/business/ecommerce/canadian-e-commerce-by-the-numbers/ . 16 Ibid. 17 “Outlook on the Worldwide Apparel Industry to 2025 - Featuring PVH, Inditex & Kering Among Others - ResearchAndMarkets.Com,” www.businesswire.com, May 14, 2020, https://www.businesswire.com/news/home/20200514005463/en/Outlook-Worldwide-Apparel-Industry-2025--- Featuring#:~:text=Global%20apparel%20market%20is%20anticipated . 18 Spotify Advertising. “The data to prove it.” Accessed November 27, 2020. https://ads.spotify.com/en-CA/ 19 The Georgia Straight, 2020. Media Kit 2020 . Available at https://www.straight.com/advertise-with-the-straight

Team Re:TRU 64 20 “Fashion Patents: Everything You Need to Know,” UpCounsel, accessed November 28, 2020, https://www.upcounsel.com/fashion- patents . 21 “About SA8000,” Social Accountability International, accessed November 27, 2020, https://sa-intl.org/programs/sa8000/ 22 “ASOS PLC ORD 3.5P (ASC.L) Stock Pr ice, News, Quote & History - Yahoo Finance,” finance.yahoo.com, accessed November 30, 2020, https://finance.yahoo.com/quote/ASC.L?p=ASC.L&.tsrc=fin-srch. 23 “Rocky Brands, Inc. (RCKY) Stock Price, News, Quote & History - Yahoo Finance,” finance.yahoo.com, accessed November 30, 2020, https://finance.yahoo.com/quote/RCKY?p=RCKY&.tsrc=fin-srch. 24 “Hanesbrands Inc. (HBI) Stock Price, News, Quote & History - Yahoo Finance,” finance.yahoo.com, accessed November 30, 2020, https://finance.yahoo.com/quote/HBI?p=HBI&.tsrc=fin-srch. 25 Euromonitor International, ”Consumer Types in Canada,” Country Profile, August 2020, Passport. 26 tentree. “How did tentree start?” Last accessed October 10, 2020. https://support.tentree.com/l/en/article/0pchj4tvq3-how-did- tentree-start 27 KOTN. “Our Story.” Last accessed October 10, 2020. https://kotn.com/about 28 Frank And Oak. “Our Story.” Last accessed October 10, 2020. https://www.frankandoak.com/our-story 29 “Compostable Mailers | Eco Friendly Mailers | Noissue,” www.noissue.co, accessed November 30, 2020, https://www.noissue.ca/custom-packaging/compostable-biodegradable-mailers. 30 Oleksandra Baukh, “Everything You Need To Know About Garment Costing And Pricing,” Techpacker Blog (Techpacker Blog, May 3, 2020), https://techpacker.com/blog/design/everything-you-need-to-know-about-garment-costing-and-pricing/. 31 “Printed Labels | Laven Labels,” laven.com, accessed November 30, 2020, http://laven.com/products/printed -labels/. 32 “Outsourced Your Custom Clothes Labels Production to Bali, Indonesia,” karmacomusa.com, accessed November 30, 2020, http://karmacomusa.com/fastfashionfactoryasia. 33 A&EClothingCorp, 2018 Product Catalogue , 2018. 34 “Services,” In House Creations, accessed November 30, 2020, https://inhousemade.com/pages/services. 35 Canada Revenue Agency, “Employers’ Guide – Payroll Deductions and Remittances - Canada.Ca,” Canada.ca, 2018, https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4001/employers-guide-payroll-deductions- remittances.html. 36 Canada Revenue Agency, “Corporation Tax Rates - Canada.Ca,” Canada.ca, 2018, https://www.canada.ca/en/revenue - agency/services/tax/businesses/topics/corporations/corporation-tax-rates.html. 37 “Mobility | TELUS Small Business,” www.telus.com, accessed November 30, 2020, https://www.telus.com/en/bc/business/small/mobility. 38 “Office Phone, Internet & Security Bundles | TELUS Small Business,” www.telus.com, accessed November 30, 2020, https://www.telus.com/en/bc/business/small/bundles?linktype=ge-meganav. 39 “Office Internet Plans | TELUS Small Business,” TELUS, accessed November 30, 2020, https://www.telus.com/en/business/small/internet/office-internet. 40 “What Is The Average Utility Cost Per Square Foot Of Commercial Property? | Iota,” Iota Communications, Inc., May 14, 2019, https://www.iotacommunications.com/blog/average-utility-cost-per-square-foot-commercial-property/. 41 “Shipping From Indonesia to Canada [Updated November 2020],” Freightos, accessed November 30, 2 020, https://www.freightos.com/shipping-routes/shipping-from-indonesia-to-canada/.

Team Re:TRU 65 42 “POS System Price for Retail - Get the Best Point of Sale!,” Lightspeed POS, 2019, https://www.lightspeedhq.com/pos/retail/pricing/. 43 “Plans & Pricing | Compare Features | QuickBooks Canada,” quickbooks.intuit.com, n.d., https://quickbooks.intuit.com/ca/pricing/. 44 “Shopify Pricing - Setup and Open Your Online Store Today – Free Trial,” Shopify, 2017, https://www.shopify.ca/pricing. 45 “Warehouse Insurance - Cost & Coverage (2020),” generalliabilityinsure.com, accessed November 30, 2020, https://generalliabilityinsure.com/small-business/warehouse-insurance.html. 46 “Hanesbrands Inc. (HBI) Stock Price, News, Quote & History - Yahoo Finance,” finance.yahoo.com, acce ssed November 30, 2020, https://finance.yahoo.com/quote/HBI?p=HBI&.tsrc=fin-srch. 47 “ASOS PLC ORD 3.5P (ASC.L) Stock Price, News, Quote & History - Yahoo Finance,” finance.yahoo.com, accessed November 30, 2020, https://finance.yahoo.com/quote/ASC.L?p=ASC.L&.tsrc=fin-srch. 48 “BOOHOO GROUP PLC ORD 1P (BOO.L) Stock Price, News, Quote & History - Yahoo Finance,” finance.yahoo.com, accessed November 30, 2020, https://finance.yahoo.com/quote/BOO.L?p=BOO.L&.tsrc=fin-srch. 49 “Rocky Brands, Inc. (RCKY) Stock Price, News, Quote & History - Yahoo Finance,” finance.yahoo.com, accessed November 30, 2020, https://finance.yahoo.com/quote/RCKY?p=RCKY&.tsrc=fin-srch.